Tips For Planning For Retirement #SHGenworth

How ready are you for retirement? The average amount that is recommended for retirement is 1 million dollars but less than 22% have even close to that. If you are working, you may have a 401K, mutual funds, bonds and securities to help cushion your retirement expenses. If you are one of the many Americans that are not working, either by choice or by circumstances, may not have those to fall back on. One of the avenues that most people can easily partake in but do not is life insurance. According to an article written by Jennifer Nelson entitled “Three Insurance Policies That Could Help Pay for Retirement”, we should not rely on our life insurance until the other avenues are exhausted. She further wrote that the three recommended avenues to be looked at are annuities, permanent life insurance and return of premium term life insurance. By looking into these options, baby boomers will be ahead of the game when planning for retirement. With the help of Genworth Financial, you can get ahead of the game in planning for retirement instead of being left behind in the dust.

Planning For Retirement

If you are age 50 and above, you should be actively planning for retirement. If you have questions of what would be the best way to do that, here is a breakdown of the three options recommended in the article mentioned above:

Annuities: An annuity is an agreement between you and an insurance company where you pay a lump sum or regular payments that are then paid back to you in your retirement. If you choose a variable annuity, you can invest in an account similar to a mutual fund. In this situation, your money will grow tax deferred until you withdraw it. This way you have a higher rate of return on your money, which will help cover the fees for withdrawal and the taxes you will pay when you withdraw your money. In most markets, you can expect a 5-6% annual return on your money.

Permanent Life Insurance: This is a policy that will accrue a cash value over the life of the policy. This is different from term life insurance which does not accrue that cash value. With permanent life insurance, you can have a great pay out if you have been able to build it over several years and you can take loans against the policy in most cases. If you do take a loan against the policy, you are free from paying taxes on the money like you would if you were to just draw from the policy directly. This does lower the death benefit, so you need to take the cost of your death into account. This is a good policy to start at any age as there are no age restrictions on these policies.

Return of Premium Term Life Insurance (ROP): This is a special type of policy in which you can get all of the premiums you have paid into back if you have not passed away. The drawback to this type of policy is that is has a higher annual premium but you get a better rate of return. This type of policy also does not have any tax on the money as it is a return of an investment you have already made. The choice you would need to make is taking the guaranteed rate of return or taking the difference in this premium versus a lower one and investing that. With that option, you are taking a gamble with your payout that you would not take with the ROP.

With Genworth, you get the benefit of years of experience when dealing with the area of finance. Whether you need guidance with retirement planning, long term care, money management and other areas, Genworth can help. When you visit their website, there is a plethora of articles, financial calculators and other tools to help you with your financial health. If you are like many Americans, you have not planned for the unexpected things in life and Genworth can help you get prepared for those times. You are in good hands with Genworth!